Gloomy export figures for July may force revised growth target

“Exports dropped again last month because of declining shipments of gold, fuel and some agricultural and industrial products, mainly rubber and rubber products. The slowing recovery of the global economy and China’s policy to rely less on international trade have affected Thailand’s exports,” Duangkamol Jiambutr, deputy director-general of the International Trade Promotion Department, said yesterday.
Exports in the first seven months of this year were down 0.42 per cent on last year to $131.6 billion, so the ministry assumes exports have a high possibility of missing the projection for the full year. However, it will wait for another month before deciding whether a revision is in order.
For annual exports to expand by 3.5 per cent, shipments should be $20.98 billion a month. At 1.9 per cent, monthly exports would need to average $20.02 billion for the rest of the year.
Other export-growth forecasts for this year are also low. The University of the Thai Chamber of Commerce predicts only 1.8 per cent, the Thai National Shippers Council 1.6 per cent, the National Economic and Social Development Board 2 per cent, and the Bank of Thailand less than 3 per cent.
The ministry needs to monitor many variables closely, particularly the falling price of rubber, despite higher volume. In the first seven months, rubber exports grew by 6.8 per cent in volume to 1.94 million tonnes, but plunged in value by 19.6 per cent year on year to $3.77 billion.
Exports of sugar also fell by 17.5 per cent in volume to 3.6 million tonnes, while value collapsed 25.8 per cent to $1.57 billion. Exports of shrimp still were on a downtrend at 17.2 per cent because the industry has not yet recovered from the EMS (early mortality syndrome) disease.
Industrial exports also contracted in the first seven months – construction materials by 18.7 per cent to $4.7 billion, televisions and parts by 1.5 per cent, and refrigerators and parts by 2.7 per cent.
However, better performances were seen in the period for other products, such as rice, vegetables and fruits, electronics and electrical appliances, and automobiles and parts.
Prayoth Benyasut, director of the ministry’s Centre of Trade, Economic Indices and Forecast Bureau of Trade and Economic Indices, said export growth should be back in positive territory this month as the export business index, based on a survey of exporters, showed shipments would expand in August.
Based on the ministry’s survey of exporters, the export business index will rise to 54.6 points in August from only 49.3 in July.
Exports should experience strong cyclical demand from September to November because each country will increase orders for the Christmas and New Year festive season.
In the first seven months, demand for Thai merchandise weakened in many markets, such as by 0.8 per cent in Japan, 4 per cent in China and 18.3 per cent in Australia, as well as in Asean. However, it strengthened in other major markets, by 3 per cent in the United States and 7.8 per cent in the European Union.
Imports in July declined for the 12th straight month by 0.3 per cent to $19.99 billion. The first seven months saw a 12.5-per-cent slide to $132.46 billion. These figures left Thailand with a trade deficit of $1.1 billion in July and $865.5 million in the first seven months of the year.
The Foreign Trade Department reported that gold imports plummeted 61 per cent year on year to $203 million from $1.4 billion in July last year.